13 Jul Social, Community, Home Care and Disability Services Industry Award 2010
Equal Remuneratiion Case – Order Important Update
Pinnacle HR has recently had a number of consultations with the Federal Fair Work Ombudsman’s Office regarding the clarification of Transitional Wage Rates and Equal Remuneration Order Calculations.
SOCIAL, COMMUNITY, HOME CARE AND DISABILITY SERVICES INDUSTRY AWARD 2010
CEA ALERT
IMPORTANT UPDATE
Number: 5
Date: July 2012
Equal Remuneration Case – Order
Social, Community, Home Care and Disability Services Industry Award 2010.
Clarification of Transitional Wage Rate and ERO calculations.
Important Update
Summary
CEA HR and Consulting has recently had a number of consultations with the Federal Fair Work Ombudsman’s Office regarding:
1) The calculation of the Transitional Wage Rate under the Social, Community, Home Care and Disability Services Industry Award effective from the first full pay period on or after 1 July 2012 and
2) The application of the Equal Remuneration Order which is effective from the first full pay period on or after 1 December 2012.
Please Note:
The Fair Work Ombudsman’s Office has advised of the following:
1) Application of the July 2012 2.9% National Wage Increase to Relevant Transitional Minimum Wage Instruments.
The Fair Work Ombudsman’s Office has advised that the July 2012 National Wage
Increase of 2.9% must be applied to the Relevant Transitional Minimum Wage Instrument.
This means that the rates in the various Relevant Minimum Wage Instruments eg:
- SACS NAPSA
- Disability Services NAPSA
- Clerks NAPSA
- Crisis Accommodation Sheltered Housing (South Australia) Award
Must be increased by 2.9% from the first full pay period on or after 1 July2012.
2) The rates in the Transitional Minimum Wage Instrument (eg SACS NAPSA) must be compared with the rates in the Social , Community , Home Care and Disability Services Industry Award and Employers must pay whichever is the HIGHER rate.
Please note the 2012 Transitional Minimum Wage Rates are now located on the CEA HR and Consulting members only website
Transitional Minimum Wage
Equal Remuneration
Clause 5.3 of the Order outlines that:
“5.3 The employer must pay an employee no less than either:
a) The minimum wage for the relevant classification in the Award, or
b) The minimum wage in the relevant transitional minimum wage instrument and/or award based transitional instrument for the classification concerned whichever is higher.”
Note:
Clause 5.3 means that Employers must pay either the SCDS rate effective from 1/7/2012 or the transitional minimum wage, eg. SACS NAPSA, Disability Services NAPSA, Clerks SA NAPSA, CASH Award rates, effective from 1/7/2012, whichever is higher.
Example 1
SACS NAPSA rates 1/7/2012.
SACS Level 3 Year 1 $808.80 per week
Compared to
SCDS rate 1/7/2012
SCDS Level 3 Pay Point 1 $770.50 per week.
Comment
Old SACS NAPSA translates to new SCDS Employee Level 3
In this example the SACS NAPSA 1/7/2011 rate of $808.80 is higher than the SCDS
1/7/2012 of $770.50 per week and accordingly the Employer would continue to apply the
HIGHER rate of $808.80 per week.
Example 2
CASH Award rates 1/7/2012.
CASH Level 4 Year 1 $892.90 per week
Compared to:
SCDS rate 1/7/2012
Crisis Accommodation employee level 2 Pay Point 1 $848.20 per week
Comment:
Old CASH Award Level 4 translates to new SCDS Award Crisis Accommodation employee Level 2.
In this example the CASH Award 1/7/2011 rate of $892.90 per week is higher than the SCDS Award 1/7/2012 rate of $848.20 per week and accordingly the Employer would continue to apply the HIGHER rate of $892.90 per week.
Transitional Equal Remuneration Payment
In addition to the Transitional Minimum Wage, the employer must pay an employee a Transitional Equal Remuneration Payment as follows:
” a) From the first full pay period on or after 1 December 2012 until the final pay period immediately before 1 December 2013, a payment equal to the difference between the Final Rate in clause 6.2 of this Order and the Transitional Minimum Wage in clause 5.3 of this Order, as increased from time to time, for the relevant classification in the Award, divided by nine.”
Effect of above:
The effect of the above is that a Transitional Equal Remuneration Payment will apply from the first full pay period on or after 1 December 2012 of the following:
The First Equal Remuneration Percentage Increase is outlined below:
First Equal Remuneration Percentage Increase 1/12/2012
Social and community services employee level 2 2.56%
Social and community services employee level 3 2.89%
Crisis accommodation employee level1
Social and community services employee level 4 3.56%
Crisis accommodation employee level 2
Social and community services employee level 5 4.11%
Crisis Accommodation employee level 3
Social and community services employee level 6 4.44%
Crisis accommodation employee level 4
Social and community services employee level 7 4.67%
Social and community services employee level 8 5.0%
Note:
Further percentage increases as per the above will apply each year from 1 December until 1 December 2020.
New Wage Schedules
New Wage Schedules will be prepared shortly and placed on the CEA HR and Consulting members web site. Further support will be provided when the rates are available.
Final Rate Percentage
The Final Rate of the Order is equal to the following percentage of the applicable minimum wage in clause 15 of the Award:
Classification in Schedule B and C of the Award
Social and community services employee level 2 123%
Social and community services employee level 3 126%
Crisis accommodation employee level1
Social and community services employee level 4 132%
Crisis accommodation employee level 2
Social and community services employee level 5 137%
Crisis Accommodation employee level 3
Social and community services employee level 6 140%
Crisis accommodation employee level 4
Social and community services employee level 7 142%
Social and community services employee level 8 145%
Fairwork Ombudsman’s (FWO) Office support re Calculation of Equal Remuneration Order.
As advised above, the First Equal Remuneration Order (ERO) Percentage Increase becomes effective from the first full pay period on or after 1 December 2012.
FWO have advised that the basis for the calculation of the ERO is as follows:
APPLICATION OF WAGE INCREASE CALCULATIONS AS PER FWO re
EMPLOYERS COVERED BY SCDS AWARD 2010
FEDERAL MINIMUM WAGE INCREASE – 1 JULY 2012:
1. Apply 2.9% increase to TRANSITIONAL AWARD (NAPSAs and Federal) rates of pay.
2. Compare NAPSA/Fed Transitional Award rates of pay to SCDS Award and pay whichever is the HIGHER.
3. The rate of pay applicable as at the first pay period on or before 1 July 2012 becomes the “transitional” rate of pay for calculating ERO increases.
Example:
SCDS Rate; L2.1, as at 1/7/12 = $18.58 per hour
SACS SA (NAPSA) Rate; L2.1 as at 1/7/12 = $19.16 per hour
New rate of pay as at 1/7/12 = $19.16 per hour
ERO (EQUAL REMUNERATION ORDER) INCREASES – FROM 1 DECEMBER 2012:
1. Apply the full 23.0% increase to the CURRENT SCDS AWARD rates of pay to determine the new Award rate of pay.
2. Look at the actual CURRENT rate of pay (as at 30/11/12).
3. Subtract the result of Step 2 from the result of Step 1.
4. DIVIDE the DIFFERENCE by 9 (ie transitioning the ERO over 9 years).
5. The result of Step 4 is the “TRANSITIONAL AMOUNT”, ie to be added each year.
6. MULTIPLY the Transitional Amount by the ‘transitional year’, ie x1; x2; x3; etc.
7. ADD the total derived from Step 6 to the figure in Step 2 = New transitional rate of pay as at the first full pay period on or before 1 December 2012.
8. NOTE: In subsequent years, at Step 6, ensure you multiply by the appropriate year of transition.
Example:
SCDS Rate; L2.1, as at 30/11/12 = $18.58 per hour
CURRENT Rate; L2.1 as at 30/11/12 = $19.16 per hour
Step 1: $18.58 x 23.0% = $22.85 per hour Step 2: Current Rate = $19.16
Step 3: $22.85 minus $19.16 = $3.69
Step 4: $3.69 divided by 9 = $0.41
Step 5: $0.41 = Transitional Amount
Step 6: $0.41 multiplied by 1 (1st
year) = $0.41
Step 7: $0.41 plus $19.16 = $19.57
$19.57 is the NEW TRANSITIONAL RATE OF PAY
Enquiries
Any enquiries regarding this CEA ALERT should be directed to Ted Davis, Executive
Director
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